Matterport Stock Is Still a Growth Story

In the world of growth stocks, investors have been in a vicious alternative reality at odds with prior animal spirits. And Matterport (NASDAQ:MTTR) has proven no exception. But does a cheaper share price offer better value in MTTR stock?

Matterport Silicon Valley exterior sign and trademark logo.
Source: Ken Wolter /

Let’s look at what’s happening off and on the price chart of MTTR, then offer a risk-adjusted determination aligned with those findings.

In the sci-fi movie The Matrix swallowing a red pill meant choosing to learn about a potentially unsettling or life-changing truth.

On the other hand, people could remain in contented ignorance by ingesting the blue pill. Those choices were presented to audiences more than 20 years ago.

Today, and with the film’s battling realities acting as a blueprint of sorts for one of Wall Street’s recent hot buzz words, the metaverse, Matterport stock investors have gone from feverishly popping the blue pill to overdosing on its red counterpart.

MTTR Stock Links Physical and Virtual

MTTR shares are the investment face of spatial-data technology which allows users to create 3D digital replicas of physical spaces.

As much, it’s not a stretch to think of Matterport’s tech as Matrix kinda stuff with its melding of the physical and virtual worlds.

More importantly, MTTR’s software is set to be a key feature in turning an emerging metaverse space into a bonafide growth market.

But it’s not only about future business prospects of what might be. Right now MTTR stock is offering investors a bullish opportunity that’s already unfolding before our eyes.

Matterport is showing real-world success in an array of industries from retail, real estate, tech, hospitality and more. Think Chick-fil-A or Redfin (NASDAQ:RDFN). They’re among its A-list clients helping with growth today.

MTTR’s most recent third-quarter results offered year-over-year subscription sales growth of 36% with revenues climbing to $15.7 million.

At the same time hefty subscription gross margins also grew by 300 basis points to 77%.

Runway for Growth

Finally, there’s a significant runway for growth. Forecasts put the total addressable market for virtual spaces at approximately $240 billion.

And with Matterport only scratching the surface with revenues of $110 million last year, Deutsche Bank believes MTTR stock is in position to compound revenues at a projected 52% annually over the next five years.

Despite that, shares have been chopped down by almost 80% from their recent all-time-high. What’s more, the painful correction has MTTR stock valued just north of $2 billion and barely a mid-cap.

To be sure, bearish worries over interest rate hikes, fearful Covid-19 and geopolitical imagery or anxieties of MTTR’s business with out-of-favor large-cap tech giant Meta Platforms (NASDAQ:FB) have all played a part.

But that’s just noise meant to distract from the truth. It’s time to trade in the red for the blue pill and purchase MTTR stock.

The Weekly Chart Tells a Story

Matterport (MTTR) trading in two-week inside candlestick pattern off all-time-lows

Source: Charts by TradingView

To be fair, if Matterport is going to become the next big thing, the outfit still has a great deal of work to do.

Growing red ink, lackluster revenue growth and subscribers which are largely non-paying customers — leaves obvious room for improvement. And that’s part of what you get with an investment in MTTR.

Blue pill aside, there’s no sugar coating MTTR stock’s shortcomings.

Still, even the best growth stories have had their share of worrying points which can be painted as insurmountable.

Think Tesla (NASDAQ:TSLA) and how each bump in the road turned into a buying opportunity.

Or right now, a very bearish FB stock, which in all likelihood represents deeper value. It’s the power of the red pill and its certainly had its grip on Matterport shares.

But technically, MTTR’s bearishness is giving way to reasons to be more upbeat.

If price is what you pay, the value of an oversold two-week inside candlestick pattern looks much more attractive than otherwise with shares just off of MTTR’s bitter red pill all-time-lows.

What MTTR Stock Isn’t

Importantly, the deep technical discount isn’t a green light to buy shares recklessly.

Matterport isn’t a widows and orphan stock. It remains a growth narrative rather than a company with real-world results that today could keep the stock afloat indefinitely. MTTR stock isn’t Coca-Cola (NYSE:KO) or Apple (NASDAQ:AAPL) for that matter.

As much, allocating risk as one might with a more speculative investment makes sense.

Alternatively, investors might consider a larger actively-managed position such as a fully-hedged collar or open-ended married put strategy.

Bottom line, those type strategies can allow investors to better navigate today’s reality in MTTR stock and maybe more surreal and happier circumstances down the road.

On the date of publication, Chris Tyler holds long positions in Matterport (MTTR) (either directly or indirectly). The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

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